Allovir Inc
For the period ended Dec 31, 2024. Filed Mar 7, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 7, 2025
KLRS$2.42+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-15.
0000950170-24-031879
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0000950170-25-035143
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 135 previous paragraphs and 151 current paragraphs.
98 unchanged; 26 reworded; 25 added; 10 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Unless otherwise indicated, all information in this Annual Report on Form 10-K gives effect to a 1-for-23 reverse stock split of our common stock that became effective on January 15, 2025, and all references to historical share and per share amounts give effect to the reverse stock split.
Current report
On November 7, 2024, we, Kalaris and Merger Sub entered into the Merger Agreement, which contains the terms and conditions of the proposed merger. Pursuant to the Merger Agreement, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, at the effective time of the Merger (as defined below), Merger Sub will merge with and into Kalaris, with Kalaris surviving as a wholly-owned subsidiary of us. We are expected to change our name to “Kalaris Therapeutics, Inc.” and continue to be listed on The Nasdaq Capital Market, but trade under the ticker symbol “KLRS”.
Current report
The merger is expected to close in the first quarter of 2025, subject to the satisfaction or waiver of various conditions, by each of the parties, at or prior to the closing of the merger, including, among other things, (i) the approval by AlloVir stockholders of (a) the issuance of shares of AlloVir common stock, which represent more than 20% of the shares of AlloVir common stock outstanding immediately prior to the merger, to Kalaris stockholders pursuant to the terms of the merger Agreement and pursuant to Nasdaq Listing Rule 5635(a) and (b) the change of control of AlloVir resulting from the merger, (ii) the adoption of the merger agreement by the requisite Kalaris stockholders, (iii) AlloVir’s net cash at the closing of the merger being no less than $95.0 million and (iv) other customary closing conditions. The merger was unanimously approved by the AlloVir board of directors. AlloVir is holding a special meeting of its stockholders on March 12, 2025, at 9:00 AM Eastern Time unless postponed or adjourned to a later date, in order to obtain the stockholder approvals necessary to complete the merger and related matters. If the merger is completed, the business of Kalaris will continue as the business of the combined company.
Current report
At the effective time of the merger, each issued and outstanding share of Kalaris common stock will be converted into the right to receive a certain number of shares of AlloVir common stock based on an exchange ratio (the “exchange ratio”). Under the exchange ratio formula in the merger agreement, upon closing of the merger, [on a pro forma basis and based upon the number of shares of AlloVir common stock expected to be issued in the merger,] it is expected that pre-merger Kalaris stockholders will own approximately 75.34% of the combined company and pre-merger AlloVir stockholders will own approximately 24.66% of the combined company, in each case, on a fully-diluted basis (excluding any shares reserved for future equity awards). Under certain circumstances, the ownership percentages may be adjusted upward or downward based on the level of AlloVir’s net cash at the closing of the merger.
Current report
The exchange ratio, and related pro forma ownership, assumes (a) a valuation of AlloVir of $116.0 million, which is subject to adjustment to the extent that AlloVir’s net cash at closing of the merger is above or below $100.0 million by more than $1.0 million (provided that AlloVir’s net cash at closing of the merger shall be no less than $95.0 million), in which case AlloVir’s valuation will be adjusted on a dollar-for-dollar basis by the difference of (i) its net cash at closing of the merger and (ii) $100.0 million, and (b) a valuation for Kalaris of $347.0 million.
Current report
Pursuant to the merger agreement, Kalaris is permitted to enter into the Additional Permitted Bridge Financing. On January 10, 2025, as a part of the first tranche of the Additional Permitted Bridge Financing, Kalaris issued the AlloVir Note under which we funded a principal amount of $3.75 million, and Kalaris issued convertible promissory notes in an aggregate principal amount of $3.75 million to existing Kalaris stockholders. Prior to the closing of the merger, Kalaris has the opportunity to receive an additional $7.5 million in the second tranche of the Additional Permitted Financing of which $3.75 million would be provided by existing Kalaris stockholders and the remaining $3.75 million would be provided by us. However, Kalaris no longer expects the second tranche of the Additional Permitted Financing to be funded. Upon the closing of the merger, the AlloVir Note will be cancelled and the aggregate amount outstanding under the AlloVir Note will be added to our net cash.
Current report
If we are unable to satisfy certain closing conditions to the merger agreement or if other mutual closing conditions to the merger agreement are not satisfied, Kalaris will not be obligated to complete the merger. If the merger agreement is terminated under specified circumstances, we could be required to pay Kalaris a termination fee of $3.48 million or Kalaris could be required to pay us a termination fee of $10.41 million. In addition, in certain circumstances upon the termination of the merger agreement, we could be required to pay the reasonable costs and expenses of Kalaris in an amount not to exceed $580,000, or Kalaris could be required to pay our reasonable costs and expenses in an amount not to exceed $580,000.
Current report
We and Kalaris believe that combining the two companies will result in a combined company with promising science, a strong leadership team and substantial capital resources, positioning it to become a biopharmaceutical company focused on developing Kalaris’ lead product candidate, TH103.
Current report
We expect to devote significant time and resources to the completion of the Merger. If the Merger is not completed, we will reconsider our strategic alternatives and may pursue one of the following courses of action, which we currently believe are the most likely alternatives if the Merger is not completed:
Current report
Pursue another strategic transaction similar to the Merger. We may resume our process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such a strategic transaction with such candidate.
Current report
Continue to operate our business. We could elect to continue to operate its business and pursue licensing or partnering transactions. To continue to operate our business, we would require a significant amount of time and financial resources, and we would be subject to all the risks and uncertainties involved in the development of product candidates. There is no assurance that we could raise sufficient capital to support these efforts, that its development efforts would be successful or that it could successfully obtain the regulatory approvals required to market any product candidate it pursued.
Current report
Dissolve and liquidate our assets. If we are unable, or do not believe we are able, to find a suitable candidate for another strategic transaction, we may dissolve and liquidate our assets. In that event, we would be required to pay all of our debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If we dissolve and liquidate our assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to our stockholders after paying our debts and other obligations and setting aside funds for commitments and contingent liabilities.
Current report
Restructuring costs consist primarily of severance and employee termination costs in connection with our workforce reduction plan.
Current report
Research and development expenses were $12.3 million for the year ended December 31, 2024, compared to $133.1 million for the year ended December 31, 2023. The decrease of $120.7 million was primarily the result of the discontinuation of our three Phase 3 registrational trials announced in December 2023 and a comprehensive review of strategic alternatives, as well as the accompanying workforce reduction, and a $5.6 million gain on lease termination and remeasurement during the year ended December 31, 2024.
Current report
General and administrative expenses were $42.9 million for the year ended December 31, 2024, compared to $48.3 million for the year ended December 31, 2023. The decrease of $5.3 million can be attributed to the decrease in personnel costs, including stock-based compensation expense, resulting from the workforce reduction plan and a $3.3 million gain on lease termination, offset by Diana Brainard's Separation Agreement (resulting in $2.4 million in severance costs and $6.6 million in accelerated stock-based compensation expense) and transaction costs associated with the Merger Agreement of $3.7 million during the year ended December 31, 2024.
Current report
Restructuring costs were $10.2 million for the year ended December 31, 2024. There were no restructuring costs during the year ended December 31, 2023. During the year ended December 31, 2024, restructuring costs primarily relate to severance and employee termination costs in connection with our workforce reduction plan.
Current report
After a comprehensive review of strategic alternatives, on November 7, 2024, we entered into the Merger Agreement with Kalaris. Pursuant to the Merger Agreement, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, at the effective time of the Merger, Merger Sub will merge with and into Kalaris, with Kalaris continuing as a wholly-owned subsidiary of ours and the surviving corporation of the Merger. The closing of the Merger is subject to certain approvals by our stockholders and the stockholders of Kalaris and other customary closing conditions. Our future operations are highly dependent on the success of the proposed Merger with Kalaris.
Current report
our ability to successfully consummate the Merger;
Current report
Merger Agreement
Current report
On November 7, 2024, we entered into the Merger Agreement pursuant to which, subject to the satisfaction or waiver of various conditions therein, Merger Sub will merge with and into Kalaris, with Kalaris surviving as our wholly-owned subsidiary. The Merger was unanimously approved by our Board. The closing of the Merger is subject to the satisfaction or waiver of various conditions, by each of the parties, at or prior to the closing of the Merger, including, among other things, (i) the approval by AlloVir stockholders of (a) the issuance of shares of AlloVir common stock, which represent more than 20% of the shares of AlloVir common stock outstanding immediately prior to the Merger, to Kalaris stockholders pursuant to the terms of the Merger Agreement and pursuant to Nasdaq Listing Rule 5635(a) and (b) the change of control of AlloVir resulting from the Merger, and (ii) the adoption of the Merger Agreement by the requisite Kalaris stockholders.
Current report
If we are unable to satisfy certain closing conditions to the Merger Agreement or if other mutual closing conditions to the Merger Agreement are not satisfied, Kalaris will not be obligated to complete the Merger. The Merger Agreement contains certain termination rights of each of us and Kalaris. Under certain circumstances detailed in the Merger Agreement, we could be required to pay Kalaris a termination fee of $3.48 million or Kalaris could be required to pay us a termination fee of $10.41 million. In addition, in certain circumstances upon the termination of the Merger Agreement, we could be required to pay the reasonable costs and expenses of Kalaris in an amount not to exceed $580,000, or Kalaris could be required to pay our reasonable costs and expenses in an amount not to exceed $580,000.
Current report
Additional Permitted Bridge Financing
Current report
Pursuant to the Merger Agreement, Kalaris is permitted to enter into the Additional Permitted Bridge Financing. On January 10, 2025, as a part of the first tranche of the Additional Permitted Bridge Financing, Kalaris issued the AlloVir Note under which we funded a principal amount of $3.75 million, and Kalaris issued convertible promissory notes in an aggregate principal amount of $3.75 million to existing Kalaris stockholders. Prior to the closing of the merger, Kalaris has the opportunity to receive an additional $7.5 million in the second tranche of the Additional Permitted Financing of which $3.75 million would be provided by existing Kalaris stockholders and the remaining $3.75 million would be provided by us. However, Kalaris no longer expects the second tranche of the Additional Permitted Financing to be funded. Upon the closing of the Merger, the AlloVir Note will be cancelled and the aggregate amount outstanding under the AlloVir Note will be added to our net cash.
Current report
Other Obligations
Current report
There were no impairment charges during the year ended December 31, 2024 and as of December 31, 2024, all leases have been terminated and paid in full.
Removed paragraphs (10)
Previous report
Research and development expenses were $133.1 million for the year ended December 31, 2023, compared to $118.9 million for the year ended December 31, 2022. The increase of $14.2 million was primarily due to:
Previous report
a $20.8 million increase in costs related to the development of posoleucel, primarily due to an increase in costs related to the outsourcing of manufacturing of $12.2 million and the development of clinical trials of $8.6 million;
Previous report
a $2.9 million decrease in costs related to the development of ALVR106, primarily due to a reduction in costs related to the outsourcing of manufacturing of $1.7 million and the development of clinical trials of $1.2 million; and
Previous report
a $3.3 million decrease in personnel expenses, including stock-based compensation expense, primarily due to a decrease in consulting costs of $2.3 million and stock-based compensation expense of $0.9 million.
Previous report
General and administrative expenses were $48.3 million for the year ended December 31, 2023, compared to $52.3 million for the year ended December 31, 2022. The decrease of $4.1 million primarily consisted of a decrease in insurance related costs of $1.7 million and a decrease in consulting and personnel expenses, including stock-based compensation, of $1.0 million.
Previous report
Net cash used in investing activities was $80.5 million for the year ended December 31, 2022, which was primarily due to purchases of investments of $228.8 million, partially offset by investment maturities of $148.3 million.
Previous report
Operating Leases
Previous report
Operating lease payments represent our commitments for future minimum lease costs under non-cancelable leases for our corporate headquarters in Waltham, MA and for dedicated manufacturing suites for the manufacture of AlloVir products at a third party contract manufacturing organization, or CMO. The total payments for our operating lease obligations at December 31, 2023 is $31.0 million, of which $11.8 million is due in the next twelve months and the remaining payments are due over the term of the respective leases. For additional details regarding our leases, see Note 5 to our consolidated financial statements.
Previous report
Purchase and Other Obligations
Previous report
We enter into contracts in the normal course of business with CROs and other third-party vendors for clinical trials and testing and manufacturing services, which can contain purchase commitments or other noncancelable obligations. Most contracts do not contain minimum purchase commitments and are cancellable by us upon written notice. Payments due upon cancellation consist of payments for services provided or expenses incurred, including non-cancelable obligations of services provided up to one year after the date of cancellation. The amount and timing of such payments are not known.
Reworded paragraphs (26)
Previous wording
We are a cell therapy company developing highly innovative allogeneic T cell therapies to treat and prevent devastating viral diseases. Our innovative and proprietary virus-specific T cell, or VST, therapy platform allows us to generate off-the-shelf VSTs designed to restore immunity in patients with T cell deficiencies who are at risk from the life-threatening consequences of viral diseases. There is an urgent medical need for therapies to treat a large number of patients suffering from viral diseases who currently have limited or no treatment options. Our platform includes three innovative, allogeneic, off-the-shelf VST therapy candidates targeting 11 different devastating viruses. Our lead product candidate, posoleucel (previously referred to as Viralym-M or ALVR105), is a multi-VST therapy that targets six viruses: adenovirus, or AdV, BK virus, or BKV, cytomegalovirus, or CMV, Epstein-Barr virus, or EBV, human herpesvirus 6, or HHV-6, and JC virus, or JCV.
Current wording
We are a biopharmaceutical company. Our initial focus was on developing highly innovative allogeneic T cell therapies to treat and prevent devastating viral diseases. Our innovative and proprietary VST therapy platform allows us to generate off-the-shelf VSTs designed to restore immunity in patients with T cell deficiencies who are at risk from the life-threatening consequences of viral diseases. This included: (1) posoleucel (ALVR105), an investigational off-the-shelf multi-virus-specific T cell therapy, which targeted six viral pathogens in immunocompromised individuals: AdV, BKV, CMV, EBV, HHV-6 and JCV; (2) ALVR106, an allogeneic, off-the-shelf VST therapy candidate developed to target devastating diseases caused by four respiratory viruses: hMPV, PIV and RSV; and (3) ALVR107, an allogeneic, off-the-shelf VST therapy candidate designed to target HBV-infected cells with the aim of curing chronic HBV infections.
Previous wording
In December 2023, we announced the discontinuation of three Phase 3 registrational trials of posoleucel following separate, pre-planned DSMB futility analyses that concluded the studies were unlikely to meet their primary endpoints. Specifically, we discontinued a multicenter, randomized, double-blind, placebo-controlled Phase 3 trial comparing posoleucel to placebo for the prevention of infection or disease due to AdV, BKV, CMV, EBV, HHV-6, or JCV in high-risk adult and pediatric patients after undergoing an allogeneic hematopoietic stem cell transplant. We also discontinued two multicenter, randomized, double-blind, placebo-controlled Phase 3 trials of posoleucel – one for the treatment of virus-associated hemorrhagic cystitis and the second for the treatment of adenovirus infection – both after allogeneic hematopoietic cell transplant.
Current wording
On December 22, 2023, we announced the discontinuation of three Phase 3 registrational trials of posoleucel following separate, pre-planned DSMB, futility analyses that concluded the studies were unlikely to meet their primary endpoints. Specifically, we discontinued a multicenter, randomized, double-blind, placebo-controlled Phase 3 trial comparing posoleucel to placebo for the prevention of infection or disease due to AdV, BKV, CMV, EBV, HHV-6, or JCV in high-risk adult and pediatric patients after undergoing an allogeneic hematopoietic stem cell transplant. We also discontinued two multicenter, randomized, double-blind, placebo-controlled Phase 3 trials of posoleucel – one for the treatment of virus-associated hemorrhagic cystitis and the second for the treatment of adenovirus infection – both after allogeneic hematopoietic cell transplant. At this time, we do not intend to resume development of posoleucel or any other product candidates. On December 22, 2023, we announced the decision to conduct a comprehensive review of strategic alternatives focused on maximizing shareholder value. We also engaged Leerink Partners as its exclusive strategic financial advisor to assist in the process of exploring strategic alternatives, including the merger with Kalaris.
Previous wording
In December 2023, we also announced that we would review the detailed datasets from those Phase 3 trials and launch a comprehensive review of strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, divestiture of assets, licensing, or other strategic transaction. We expect to devote substantial time and resources to exploring strategic alternatives that our board of directors believes will maximize stockholder value. Despite devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that any transaction, if pursued, will be completed on attractive terms or at all. We have not set a timetable for completion of this strategic review process, and our board of directors has not approved a definitive course of action. Additionally, there can be no assurances that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value, or that we will make any cash distributions to our stockholders. In connection with the evaluation of strategic alternatives and in order maximize capital preservation, we have implemented a plan to reduce our workforce by approximately 95%. This workforce reduction plan was approved in January 2024, and will take place primarily during the first quarter of 2024 and is expected to be substantially completed by April 15, 2024.
Current wording
In connection with the evaluation of strategic alternatives to maximize capital preservation, we have implemented a plan to reduce our workforce by approximately 95%. This workforce reduction plan was approved in January 2024, took place primarily during the first quarter of 2024 and was substantially completed by April 15, 2024.
Previous wording
Our pipeline includes additional investigational VST therapies that may benefit high-risk individuals. ALVR106 is our second off-the-shelf, multi-VST product candidate targeting devastating respiratory diseases caused by human metapneumovirus, or hMPV, influenza, parainfluenza virus, or PIV and respiratory syncytial virus, or RSV. A Phase 1b/2 POC clinical study of ALVR106 has completed enrollment of patients in Part A of the trial. We have paused development of ALVR106, including discontinuing the trial pending the outcome of our review of strategic alternatives. In the preclinical space, preclinical and IND-enabling studies of ALVR107 to treat and cure HBV were completed in 2022 to support advancement into a POC study. Clinical development of ALVR107 is currently paused pending the outcome of our review of strategic alternatives.
Current wording
Our pipeline includes additional investigational VST therapies that may benefit high-risk individuals. ALVR106 is our second off-the-shelf, multi-VST product candidate that targets devastating respiratory diseases caused by hMPV, influenza, PIV and RSV. A Phase 1b/2 POC clinical study of ALVR106 has completed enrollment of patients in Part A of the trial. We have stopped development of ALVR106, including discontinuing the trial pending the outcome of our review of strategic alternatives. ALVR107 is our preclinical stage product candidate designed to target HBV-infected cells and with the aim of curing chronic HBV infections. Preclinical and IND enabling studies of ALVR107 to treat and cure hepatitis B were completed in 2022 to support advancement into a POC study. We have stopped clinical development of ALVR107 pending the outcome of our review of strategic alternatives.
Previous wording
On August 3, 2020, we completed an initial public offering, or IPO, of our common stock and issued and sold 18,687,500 shares of our common stock at a public offering price of $17.00 per share, resulting in net proceeds of $292.0 million after deducting underwriting discounts and commissions and offering costs. Prior to our IPO, we funded our operations through equity financings and received proceeds of $156.3 million, net of offering costs of $0.6 million, from the sale of our preferred stock.
Current wording
On August 3, 2020, we completed an initial public offering (“IPO”), of our common stock and issued and sold 812,500 shares of our common stock at a public offering price of $391.00 per share, resulting in net proceeds of $292.0 million after deducting underwriting discounts and commissions and offering costs. Prior to our IPO, we funded our operations through equity financings and received proceeds of $156.3 million, net of offering costs of $0.6 million, from the sale of our preferred stock.
Previous wording
On July 26, 2022, we entered into a Securities Purchase Agreement, or the Securities Purchase Agreement, with certain investors for the issuance and sale of 27,458,095 shares of our common stock for aggregate net proceeds of $126.4 million.
Current wording
On July 26, 2022, we entered into a Securities Purchase Agreement (“Securities Purchase Agreement”), with certain investors for the issuance and sale of 1,193,830 shares of our common stock for aggregate net proceeds of $126.4 million.
Previous wording
On June 21, 2023, we entered into an underwriting agreement with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BoFA Securities, Inc., as the representatives of the several underwriters, or Underwriters, relating to an underwritten public offering of 20,000,000 shares of our common stock at a public offering price of $3.75 per share, resulting in net proceeds of $70.2 million after deducting underwriting discounts, commissions and offering costs.
Current wording
On June 21, 2023, we entered into an underwriting agreement with J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and BoFA Securities, Inc., as the representatives of the several underwriters (“Underwriters”), relating to an underwritten public offering of 869,565 shares of our common stock at a public offering price of $86.25 per share, resulting in net proceeds of $70.2 million after deducting underwriting discounts, commissions and offering costs.
Previous wording
On August 6, 2021, we filed an automatically effective registration statement on Form S-3, or Registration Statement, with the SEC which registered the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. We simultaneously entered into a sales agreement with SVB Leerink LLC, as sales agent, to provide for the issuance and sale by the Company of up to $100.0 million of common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement, or the ATM Program. On February 10, 2022 we filed a Post-Effective Amendment No. 2 to the Registration Statement and on February 18, 2022 we filed Post-Effective Amendment No. 3 to the Registration Statement. On June 21, 2023, we suspended our use of and terminated the prospectus supplement under the ATM Program. We will not make any sales under the ATM Program unless and until a new prospectus supplement or a new registration statement is filed. Other than the termination of the prospectus supplement, the sales agreement remains in full force and effect. As of December 31, 2023, no sales had been made pursuant to the ATM Program.
Current wording
On August 6, 2021, we filed an automatically effective registration statement on Form S-3 (“Registration Statement”), with the SEC which registered the offering, issuance and sale of an unspecified amount of common stock, preferred stock, debt securities, warrants and/or units of any combination thereof. We simultaneously entered into a sales agreement with SVB Leerink LLC, as sales agent, to provide for the issuance and sale of up to $100.0 million of our common stock from time to time in “at-the-market” offerings under the Registration Statement and related prospectus filed with the Registration Statement (“ATM Program”). On February 10, 2022 we filed a Post-Effective Amendment No. 2 to the Registration Statement and on February 18, 2022 we filed Post-Effective Amendment No. 3 to the Registration Statement. On June 21, 2023, we suspended our use of and terminated the prospectus supplement under the ATM Program. We will not make any sales under the ATM Program unless and until a new prospectus supplement or a new registration statement is filed. Other than the termination of the prospectus supplement, the sales agreement remains in full force and effect. As of December 31, 2024, no sales had been made pursuant to the ATM Program.
Previous wording
We have incurred significant operating losses since inception, including net losses of $190.4 million and $168.7 million for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, we had an accumulated deficit of $656.2 million.
Current wording
We have incurred significant operating losses since inception, including net losses of $58.8 million and $190.4 million for the years ended December 31, 2024 and 2023, respectively. At December 31, 2024, we had an accumulated deficit of $715.0 million.
Previous wording
These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect losses to decrease in the foreseeable future due to our workforce reduction plan and discontinuation of our clinical trials. We expect to continue to incur costs and expenditures in connection with our ongoing evaluation of strategic alternatives and we will continue to incur costs associated with operating as a public company. There can be no assurance, however, that we will be able to successfully consummate any particular strategic transaction. The process of evaluating strategic transactions has been and may continue to be costly, time-consuming and complex, and we may incur significant costs related to these processes, such as legal, accounting and advisory fees and expenses and other related charges. A considerable portion of these costs will be incurred regardless of whether any particular course of action is implemented or transaction is completed. Any such expenses will decrease the remaining cash available for use in our business. In addition, any strategic business combination or other transactions that we may consummate in the future, could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affects our business and decreases the remaining cash available for use in our business or the execution of our strategic plan. There can be no assurances that any particular course of action, business arrangement, transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value or achieve the anticipated results. Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our stockholders.
Current wording
These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations. We expect losses to decrease in the foreseeable future due to our workforce reduction plan and discontinuation of our clinical trials. We expect to continue to incur costs and expenditures in connection with the Merger and we will continue to incur costs associated with operating as a public company. There can be no assurance, however, that we will be able to successfully consummate the Merger. The Merger has been and may continue to be costly, time-consuming and complex, and we may incur significant costs related to the Merger, such as legal, accounting and advisory fees and expenses and other related charges. A considerable portion of these costs will be incurred regardless of whether the Merger is implemented or completed. Any such expenses will decrease the remaining cash available for use in our business. In addition, any strategic business combination or other transactions that we may consummate in the future, could have a variety of negative consequences and we may implement a course of action or consummate a transaction that yields unexpected results that adversely affects our business and decreases the remaining cash available for use in our business or the execution of our strategic plan. There can be no assurances that any particular course of action, business arrangement, transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value or achieve the anticipated results. Any failure of such potential transaction to achieve the anticipated results could significantly impair our ability to enter into any future strategic transactions and may significantly diminish or delay any future distributions to our stockholders.
Previous wording
At December 31, 2023, we had cash, cash equivalents and short-term investments of $183.9 million. Based on current projections, we believe that our existing cash, cash equivalents and short-term investments, will enable us to fund our operating expenses and capital expenditure requirements through at least twelve months following the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. However, due to the discontinuation of our clinical trials and research activities, as well as our workforce reduction plan, management has concluded that there is a substantial doubt regarding our ability to continue as a going concern for more than twelve months after the date the consolidated financial statements are available to be issued. See “—Liquidity and Capital Resources.”
Current wording
At December 31, 2024, we had cash and cash equivalents of $118.3 million. Based on current projections, we believe that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure requirements through at least twelve months following the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. However, due to the discontinuation of our clinical trials and research activities, as well as our workforce reduction, management has concluded that there is a substantial doubt regarding our ability to continue as a going concern for more than twelve months after the date the consolidated financial statements are issued. See “—Liquidity and Capital Resources.”
Previous wording
Should we resume the development of product candidates, the development of our product candidates could be disrupted and materially adversely affected in the future by a pandemic, epidemic or outbreak of an infectious disease, such as the COVID-19 pandemic. The spread of COVID-19 impacted the global economy and our operations, including the interruption of our preclinical and clinical trial activities and potential interruption to our supply chain. For example, the COVID-19 pandemic delayed clinical trials. Although the immediate impacts of COVID-19 have receded, if the disruption due to COVID-19 resurges, our planned pivotal clinical trials also could be delayed due to government orders and site policies on account of a pandemic like the COVID-19 pandemic, and some patients may be unwilling or unable to travel to study sites, enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct preclinical studies and clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates. Furthermore, COVID-19 could affect our employees or the employees of research sites and service providers on whom we rely, including CROs, as well as those of companies with which we do business, including our suppliers and CMOs, thereby disrupting our business operations.
Current wording
Should we resume the development of product candidates, the development of our product candidates could be disrupted and materially adversely affected in the future by a pandemic, epidemic or outbreak of an infectious disease, such as the COVID-19 pandemic. The spread of COVID-19 impacted the global economy and our operations, including the interruption of our preclinical and clinical trial activities and potential interruption to our supply chain. For example, the COVID-19 pandemic delayed clinical trials. Although the immediate impacts of COVID-19 have receded, if the disruption due to COVID-19 resurges, our planned pivotal clinical trials also could be delayed due to government orders and site policies on account of a pandemic like the COVID-19 pandemic, and some patients may be unwilling or unable to travel to study sites, enroll in our trials or be unable to comply with clinical trial protocols if quarantines impede patient movement or interrupt healthcare services, which would delay our ability to conduct preclinical studies and clinical trials or release clinical trial results and could delay our ability to obtain regulatory approval and commercialize our product candidates. Furthermore, a pandemic like COVID-19 could affect our employees or the employees of research sites and service providers on whom we rely, including CROs, as well as those of companies with which we do business, including our suppliers and CMOs, thereby disrupting our business operations.
Previous wording
On September 17, 2018, we entered into a Series A2 Preferred Stock Purchase Agreement, or the Series A2 Agreement, with ElevateBio, and ElevateBio was a purchaser in our registered direct offering in July 2022. ElevateBio, through its diverse platform of technologies to support cell and gene therapy products and expertise, provides drug development and manufacturing services. As a result of ElevateBio’s purchase of our Series A2 Preferred Stock, which converted to common stock upon completion of our IPO, and as a result of ElevateBio’s participation in the July 2022 registered direct offering, ElevateBio acquired an ownership interest in the Company. The Chief Financial Officer of ElevateBio currently serves in a similar management role with us. In May 2021, Diana M. Brainard M.D., succeeded David Hallal, ElevateBio’s Chief Executive Officer, as the Company’s Chief Executive Officer. Mr. Hallal currently serves as Executive Chairman of the Company's board of directors. In addition to Mr. Hallal and Mr. Sinha, Morana Jovan-Embiricos, a director of the Company's board of directors, also serves as a director of the board of directors of ElevateBio.
Current wording
On September 17, 2018, we entered into a Series A2 Preferred Stock Purchase Agreement, or the Series A2 Agreement, with ElevateBio, LLC, or ElevateBio, and ElevateBio was a purchaser in our registered direct offering in July 2022. ElevateBio, through its diverse platform of technologies to support cell and gene therapy products and expertise, provides drug development and manufacturing services. As a result of ElevateBio’s purchase of our Series A2 Preferred Stock, which converted to common stock upon completion of our IPO, and as a result of ElevateBio’s participation in the July 2022 registered direct offering, ElevateBio acquired an ownership interest in our Company. In May 2021, Diana M. Brainard, M.D., succeeded David Hallal, ElevateBio’s Chief Executive Officer, as our Chief Executive Officer. Mr. Hallal currently serves as Executive Chairman of our board of directors. Vikas Sinha, our President and Chief Financial Officer, also serves as the Chief Financial Officer of ElevateBio. In addition to Mr. Hallal and Mr. Sinha, Morana Jovan-Embiricos, a director of our board of directors, also serves as a director of the board of directors of ElevateBio.
Previous wording
Should we resume development of our product candidates, any changes in the outcome of any of these variables with respect to the development of our product candidates in clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. For example, if the FDA, the European Medicines Agency, or the EMA, or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.
Current wording
Should we resume development of our product candidates, any changes in the outcome of any of these variables with respect to the development of our product candidates in clinical development could mean a significant change in the costs and timing associated with the development of these product candidates. We may never succeed in achieving regulatory approval for any of our product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others. For example, if the FDA, the EMA, or another regulatory authority were to delay our planned start of clinical trials or require us to conduct clinical trials or other testing beyond those that we currently expect or if we experience significant delays in enrollment in any of our planned clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development of that product candidate.
Previous wording
Impairment costs were $18.6 million for the year ended December 31, 2023, including $16.6 million related to operating leases, $1.4 million related to implementation costs associated with cloud computing arrangements, and $0.5 million related to property and equipment, due to the December 2023 announcement of the discontinuation of our three Phase 3 registrational trials and a comprehensive review of strategic alternatives.
Current wording
There were no impairment costs during the year ended December 31, 2024. Impairment costs were $18.6 million for the year ended December 31, 2023. During the year ended December 31, 2023, impairment costs consist of impairment charges of $16.6 million related to operating leases, $1.4 million related to implementation costs associated with cloud computing arrangements, and $0.5 million related to property and equipment due to the December 2023 announcement of the discontinuation of our three Phase 3 registrational trials and a comprehensive review of strategic alternatives.
Previous wording
Total “other income (loss), net” was $9.4 million for the year ended December 31, 2023, compared to $2.2 million for the year ended December 31, 2022. The increase of $7.1 million is primarily attributable to an increase of $3.9 million in interest income, an increase of $2.6 million in accretion of discounts on short-term investments, and a decrease of $0.6 million in foreign exchange losses.
Current wording
Total other income (loss), net was $6.7 million for the year ended December 31, 2024, compared to $9.4 million for the year ended December 31, 2023. The decrease of $2.7 million is primarily attributable to a decrease in accretion of discounts on short-term investments.
Previous wording
We currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our manufacturing, licensing and lease obligations described further below.
Current wording
We currently have no ongoing material financing commitments, such as lines of credit or guarantees, that are expected to affect our liquidity over the next five years, other than our licensing agreements described further below.
Previous wording
At December 31, 2023, our cash, cash equivalents and short-term investments were $183.9 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements through at least twelve months following the issuance of these financial statements. However, in light of the discontinuation of all of our clinical trials and research activities, as well as our workforce reduction plan, we have concluded that there is a substantial doubt regarding our ability to continue as a going concern for at least twelve months following the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect.
Current wording
At December 31, 2024, our cash, cash equivalents and short-term investments were $118.3 million. We believe that our existing cash, cash equivalents and short-term investments will enable us to fund planned operations through at least twelve months following the issuance of these financial statements. However, in light of the discontinuation of all of our clinical trials and research activities, as well as our workforce reduction plan, we have concluded that there is a substantial doubt regarding our ability to continue as a going concern for at least twelve months following the issuance of these financial statements. We have based this estimate on assumptions that may prove to be wrong, and we could expend our capital resources sooner than we expect.
Previous wording
We expect our research and development expenses to continue to decrease significantly given the discontinuation of our clinical trials and research activities and workforce reduction plan. We will continue to incur costs associated with operating as a public company, and will also incur costs associated with our review of strategic alternatives.
Current wording
We expect our research and development expenses to continue to decrease significantly given the discontinuation of our clinical trials and research activities and workforce reduction plan. We will continue to incur costs associated with operating as a public company, and will also incur costs associated with the Merger.
Previous wording
Net cash used in operating activities was $142.1 million for the year ended December 31, 2022, reflecting a net loss of $168.7 million, partially offset by non-cash charges of $42.8 million. The non-cash charges primarily consist of stock-based compensation expense of $41.3 million. The change in our net operating assets and liabilities of $(16.1) million was primarily due to a decrease of $12.6 million in accounts payable, accrued expenses and amount due to related party, and an increase of $3.0 million in prepaid expenses and other current assets and prepaid expenses to related party.
Current wording
Net cash used in operating activities was $67.7 million for the year ended December 31, 2024, reflecting a net loss of $58.8 million and a decrease in our net operating assets and liabilities of $25.3 million, partially offset by non-cash charges of $16.4 million. The change in net operating assets and liabilities was due to a decrease of $29.9 million in accounts payable, accrued expenses and other liabilities due in large part to the termination of our leases in 2024, offset by a decrease of $3.2 million in prepaid expenses and other current assets. Non-cash charges primarily consist of stock-based compensation expense of $26.3 million offset by a gain on lease termination and remeasurement of $8.9 million.
Previous wording
The $17.6 million decrease in cash used in operating activities for the year ended December 31, 2023 compared to the year ended December 31, 2022 was primarily due to the change in net operating assets and liabilities due to timing.
Current wording
Overall, the $56.7 million decrease in cash used in operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 was a result of the December 2023 announcement of the discontinuation of our three Phase 3 registrational trials.
Previous wording
Net cash provided by investing activities was $38.0 million for the year ended December 31, 2023, which was primarily due to investment maturities of $163.8 million, partially offset by purchases of investments of $125.8 million.
Current wording
Net cash provided by investing activities was $38.0 million for the year ended December 31, 2023, which was due to investment maturities of $163.8 million, partially offset by purchases of investments of $125.8 million.
Previous wording
Net cash provided by financing activities was $127.0 million for the year ended December 31, 2022, which was primarily due to net proceeds from the issuance of common stock in our registered direct offering of $126.4 million..
Current wording
Net cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from the issuance of stock under our employee stock purchase plan.
Previous wording
Net cash provided by financing activities was $70.5 million for the year ended December 31, 2023, which was primarily due to net proceeds from the issuance of common stock in our public offering of $70.2 million..
Current wording
Net cash provided by financing activities was $70.5 million for the year ended December 31, 2023, which was due to $70.2 million in net proceeds from the issuance of common stock in our public offering and $0.3 million in proceeds from the issuance of stock under our employee stock purchase plan.
Previous wording
During the year ended December 31, 2023, the Company recorded an impairment loss of $16.6 million to the operating lease right-of-use assets. The fair value of the operating lease right-of-use assets was based on estimated subleasing scenarios, which represent the highest and best use of the right-of-use assets. This fair value assessment utilized market participant assumptions, including the anticipated amount and timing of sublease payments using current real estate trends and market conditions. Given the current office lease market rental conditions, our estimates are subject to significant uncertainty. The ultimate amount of sublease income may be significantly lower or higher than the amounts used to record our impairment charges, and we may record additional impairment charges in future periods as our estimates change if we enter into sublease negotiations or execute a sublease agreement. As of December 31, 2023, the remaining right-of-use asset balance is $2.2 million, which could be subject to future impairment.
Current wording
During the year ended December 31, 2023, we recorded an impairment loss of $16.6 million to the operating lease right-of-use assets. The fair value of the operating lease right-of-use assets was based on estimated subleasing scenarios, which represent the highest and best use of the right-of-use assets. This fair value assessment utilized market participant assumptions, including the anticipated amount and timing of sublease payments using current real estate trends and market conditions. Given the current office lease market rental conditions, our estimates are subject to significant uncertainty. The ultimate amount of sublease income may be significantly lower or higher than the amounts used to record our impairment charges, and we may record additional impairment charges in future periods as our estimates change if we enter into sublease negotiations or execute a sublease agreement.
Previous wording
We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Current wording
We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in this Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
the costs and timing of the Merger;
Current report — wording carried from elsewhere
Net cash provided by investing activities was $95.0 million for the year ended December 31, 2024, which was due to investment maturities.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table summarizes our research and development costs for each of the periods presented (in thousands):